It's over two years now since Wolverhampton was voted fifth worst city in the world by Lonely Planet and Wulfrunians are still smarting. "It was just a pathetic list made up by one person. The media jumped on it because it came at that quiet time between Christmas and new year, but it really, really hurt the local community," said Kim Gilmour, operations director of the city centre management company. "I think that people should come and visit us and see for themselves what we have to offer."

Happily for Gilmour, Wolverhampton's potential has been spotted by the retail guru Mary Portas, who has chosen the city as one of 12 "Portas Pilots", which will each receive £100,000 from the government. The money will be used to resuscitate the city centre, which, like most of the other pilots, has been particularly hard hit by the recession. A total of 370 towns applied to be one of the "Portas Pilots".

Wolverhampton wowed Portas with its idea of introducing "contemporary town criers" to shout about the city's best bits ("They'll shout 'oh yey, oh yey!' and then tell people what's on," said Gilmour). But most of the money will be used for a Dragon's Den-style project to support entrepreneurs while solving one of the city's biggest problems. Wolverhampton has the fifth highest level of empty shops in the country, and so new businesses will be given grants to move into abandoned buildings to trade and showcase their work.

With just under 9,000 residents, Liskeard in Cornwall is a minnow compared with Wolverhampton, but it has similar problems. Twenty-two shops are lying empty, 14% of the town's retail space, and as Sally Hawken reluctantly attests, it's become the sort of place people leave rather than head to. "Twenty-five per cent of our economically active people work in Plymouth," said the charity worker. "They drive over the Tamar bridge to another county, and because when they are finished everything in Liskeard is shut, they do their shopping and socialising in Plymouth too."

As another of the "Portas Pilots", Hawken and other volunteers in Lizkeard hope to reverse that trend by "injecting fun back into the tired town centre". They hope to tempt shoppers back from the out-of-town supermarkets with guerrilla gardening projects and "yarn bombing", which Hawken says will involve "covering benches and things with knitting".

They also have a plan entitled Floral Toilets which aims to spruce up the public loos with hanging baskets. They've already carried out their first flashmob, dubbed a "cashmob", where they persuaded people to wear red and spend £10 in the town centre and then report back what they spent the money on.

Unlike Wolverhampton, Liskeard doesn't have an obvious image problem – it's just that not enough people consider the town worth a visit, said Hawken. "When people in London think of Cornwall, they think of sandy beaches and coastlines and it's just not like that here," she said.

Some people were wary about applying for the grant for fear of generating adverse publicity, admitted Hawken. "There were a couple of people who said 'do we want to do this? Isn't this bringing the wrong sort of attention to Liskeard, suggesting it's down at heel?'."

In the end, though, they decided being a pilot would draw attention to Lizkeard's charms. "We can't shy away from the fact there are challenges in the town," said Hawken, "but there are a lot of good things too."

Bedminister's problem is that too many people drive through it without stopping, said Ben Barker, a resident in the Bristol suburb since the 1970s. "Our specific issue is that we are awash with traffic. If you drive from A to B in the Bristol area we are often in the middle," said the 73-year-old, who was the driving force behind Bedminster's successful bid for £100,000 from the Portas pot.

Barker and other volunteers want to use the money to make more people shop in the area rather than speeding by on their way to a retail park or Bristol city centre. The most unusual aspect of their plan is to introduce a bicycle rickshaw service which will deliver people's shopping to their homes. "And if that goes well, we hope to expand it into a taxi service," said Barker.

Portas said: "It is now clearer to me than ever that Britain wants its town centres revitalised and the energy and accountability for that needs to rest with the people who live and do business there."

Local government minister Grant Shapps said on Fridayyesterday that unsuccessful applicants should not despair – the quality of the bids had been so high that he was launching a second round of the competition, which will see 15 additional pilots announced in July. Applicants should submit their bids by 30 June.

Shapps said there was no need for unsuccessful applicants to reapply, but they could sharpen up their bids if they wished and submit them again by 30 June, which was also the deadline for new town teams to apply.

He said it was clear that Portas's review into the high street was the "catalyst communities craved" to get together and secure the future of their town centres.